The Toyota RAV4 Prime is a plug-in hybrid SUV with plenty of perks. The RAV4 Prime may not be eligible for the federal electric vehicle tax incentive for much longer. The SUV is worth looking into before it becomes much more expensive.
Toyota’s tax credit days are numbered
Uncle Sam giveth and Uncle Sam taketh away. If you thought federal electric vehicle tax credits were too good to be true, you might be on to something. Before diving into why the RAV4 Prime is an incredible buy right now, let’s break down federal electric vehicle tax credits.
Back in 2010, the federal government decided to provide new electric vehicle tax credits as an incentive for American consumers to buy EVs. Why does the government care what type of vehicle you drive? Studies have concluded that carbon emissions have a detrimental effect on our environment. These emissions can potentially cause health issues and climate change over time.
Climate change is directly responsible for severe weather and natural disasters like hurricanes and floods. Rising sea levels pose a threat to many regions internationally. UN News found that natural disasters occur as much as three times more often than 50 years ago.
Whether you choose to believe in climate change or not is your prerogative, but the U.S. government is taking action to reduce carbon emissions. Federal EV tax credits exist as a way to reduce carbon emissions by incentivizing electric vehicle purchases. Like most good things in life, the tax credits come in a limited supply.
The Toyota RAV4 Prime won’t be eligible for tax credits forever
According to InsideEVs, Toyota is running out of federal tax credits. The federal government has limited automakers to 200,000 tax credits. Toyota has already used 190,000 of those credits. So, what happens once the automaker reaches its 200,000-unit limit?
The government will gradually decrease the incentive incrementally until Toyota EVs are no longer eligible. This is tough news for consumers who thought the incentive was here to stay. The number of Toyota EV sales makes buying a RAV4 Prime a more time-sensitive issue for those who want the tax credit.
The 2022 Toyota RAV4 Prime starts at $39,800. It is currently eligible for a $7,500 federal electric vehicle tax credit. Consumers who get the RAV4 Prime in time for this incentive are paying closer to $32,300.
The Toyota RAV4 Prime has incredible range and power
Why is the RAV4 Prime such a good deal after incentives in the first place? The Toyota RAV4 Prime is quicker than the average RAV4. It also can travel much farther on a single tank of gas thanks to its plug-in hybrid powertrain.
The plug-in hybrid SUV makes an incredible 302 horsepower with the help of dual electric motors. It gets an incredible 40 miles per gallon in the city and 36 miles per gallon on the highway. The SUV has a 42-mile electric-only driving range.
The Toyota RAV4 Prime is a small SUV that’s shockingly quick for its size. Its fuel economy also makes it a great deal. If consumers don’t jump on the RAV4 Prime, they could lose the chance to claim the $7,500 tax credit.